Levitt, Stephen and Stephen J. Dubner (2015).
HURRAY FOR HIGH GAS PRICES! 55
When to rob a bank ... and 131 more warped suggestions
and well-intended rants. Harper Luxe. New York. USA.
Pag 54-99
Pag 248-284
Chapter 3
Hurray for High Gas Prices!
III
Jf there is one thing economists think they
know everything about, it is prices. To an
economist, there is a price on everything,
and everything has a price. Regular people think of
prices as what you grumble about at the store; econ
omists think of prices as the Jogic that organizes our
world. So of course we've had a lot to say on this topic
over the years.
SOMEBODY BATES ME $5 WORTH
(SDL)
There is a website-one that is so stupid I feel embar
rassed to even give it free publicity-called www.
WhoToHate.com. The idea behind the site is you pay
them five bucks, write in the name of someone you
hate, and the website writes to the person telling them
that there is someone who hates them.
I got one of those hate mails today, meaning that
someone hates me enough to be willing to pay five dol
lars to have me receive such an e-mail.
From an economic perspective, it is an interesting
product they are providing. Does the person spend
ing the five dollars get utility from the act of declaring
(albeit completely anonymously) their hatred? Or does
the utility come from the (real or imagined) pain on the
part of the recipient when he or she discovers the depth
of another's hatred?
For someone who actively hates me, the only source
of satisfaction would be the first channel. I already get
loads of hatred coming my way every day-hatred
that is far more vicious than this whimsical e-mail I
received after they spent five dollars. Indeed, the fact
that the person who hates me identified me as Steve
Levitt from California (where I lived only briefly while
visiting Stanford a number of years ago) actually gave
me a good chuckle.
It got me thinking. Maybe the website would be well
served to allow the hater to make a payment greater
than five dollars. By paying fifty dollars to demon
strate their hatred, and relaying that information to the
56 WHEN TO ROB A BANK
hated person, it could really send the message. Perhaps,
though, haters prefer to send ten separate five-dollar
messages to create the impression that everyone hates
you a little, rather than one person hates you a lot.
What saddens me about the website is that where it
could really have sorne bite is for sorne innocent teen
ager who is singled out for hatred by his or her peers.
For a person who only gets a few e-mails a day to begin
with, receiving ten or twelve e-mails saying that anon
ymous people hate you might be pretty discouraging.
The good news is that apparently not many people
feel enough hatred to want to spend five dollars to
make that hatred known. The current list of the ten
most hated people includes sorne well-known names
(l've omitted the people I have never heard of, out of
fear they are the innocent teens I mentioned). Here is
the list, with their number of hatreds:
George Bush (7)
Hillary Clinton (3)
Oprah Winfrey (3)
Gloria Steinem (3)
Barbara Boxer (2)
So even with all the people who hate George Bush,
only seven people have been willing to pony up the five
HURRAY FOR HIGH GAS PRICES! 57
dollars ! To rp.ake the top-ten list, you only need two
people to hate you. That shouldn't be hard for me. I'm
already halfway there.
IF CRACK DEALERS TOOK LESSONS
FROM WALGREENS, THEY REALLY
WOULD BE RICH
(SJD)
Not long ago, I was chatting with a physician in
Houston, the sort of older gentleman family doctor you
don't see much of anymore. His name is Cyril Wolf.
He's originally from South Africa, but other than that,
he struck me as the quintessential American general
practitioner of decades past.
I'd asked him a variety of questions-what's changed
in recent years in his practice, how managed care has
affected him, etc.-when suddenly his eyes fired up,
his jaw set tight, and his voice took on a tone of great
exasperation. He began to describe a simple but huge
problem in his practice: a lot of generic medications are
still too expensive for his patients to afford. Many of
his patients, he explained, must pay for their drugs out
of pocket, and yet even the generic drugs at pharmacy
chains like Walgreens, Eckerd, and CVS could cost
them dearly.
58 WHEN TO ROB A BANK
So Wolf began snooping around and found that two
chains, Costeo and Sam's Club, sold generics at prices
far, far below the other chains. Even once you factor in
the cost of buying a membership at Costeo and Sam's
Club, the price differences were astounding. (Nor,
apparently, do you need to be a member of either store
to use their pharmacy, although membership <loes bring
a further discount.) Here are the prices Wolf found at
Houston stores for_ ninety tablets of generic Prozac:
Walgreens: $117
Eckerd: $115
CVS: $115
Sam's C lub: $15
Costeo: $12
T hose aren't typos. Walgreens charges $117 for a
bottle of the same pills for which Costeo charges $12.
I was skeptical at first. Why on earth, I asked Wolf,
would anyone pay $100 extra-probably every month
to fill a prescription at Walgreens instead of Costeo?
His answer: if a retiree is used to filling his prescrip
tions at Walgreens, that's where he fills his prescrip
tions, and he assumes that the price of a generic drug
(or, perhaps, any drug) is pretty much the same at any
pharmacy. Talk about information asymmetry; talk
about price discrimination!
HURRAY FOR HIGH GAS PRICES! 59
I had meant to write about this, and had collected a
few relevant links: a TV news report in Houston about
Wolf's discovery; an extensive price comparison com
piled by a TV news reporter in Detroit; a Consumer
Reports survey; and a research report on the subject
from Senator Dianne Feinstein.
But I had forgotten all about this issue until I read a
comprehensive Wall Street Journal article that <loes a
good job of measuring the difference in prices between
chains. Most of the differences aren't as drastic as
Wolf's example, but are often still huge. Perhaps the
most interesting sentence is this one:
After a call from a reporter, CVS said it would drop
its simvastatin price [from $108.99] to $79.99, as
part of an "ongoing price analysis."
So that's what it's called: "ongoing price analysis."
I'II have to remember that the next time my kids catch
me trying to buy a two-dollar toy when I'd promised
one for twenty.
THE NEW-CAR MATING DANCE
(SDL)
My car is ten years old, so I went out to buy a new one this
weekend. In Freakonomics and SuperFreakonomics.,
60 WHEN TO ROB A BANK
we write a lot about how the Internet has changed
markets in which there are information asymmetries.
Buying a new car gave me the chance to see firsthand
these forces at work in the new car market.
I was not disappointed. 1 already knew what kind
of car I wanted. Within fifteen minutes and at no cost,
using sites like TrueCar and Edmunds, 1 not only had
a good idea of a fair price to pay for the car, but also
was able to notify sorne local car dealerships that I was
interested in quotes.
Just a few minutes later, one car dealership offered
to sell me the car at $1,300 under invoice. That seemed
like a good place to start, but before I could even round
up the kids to drag them to the dealership, another
dealership called, and when they heard the offer from
the first dealership, they beat that offer by a few hun
dred dollars. I called the first dealership back and got
voice mail, so we headed off to the second one. I fig
ured I was still far away from a final price, but I was off
to a good start without even leaving our house.
I learned a lot about buying cars the last time I
bought one-the various lies that dealerships tell with
respect to invoice prices; the ridiculous game of cat
and mouse with the salesperson trotting off to talk to
the manager, etc. 1 abhorred the process the last time
we needed a car, but this time, thinking about it more
HURRAY FOR HIGH GAS PRICES! 61
intellectually, I was eager to take part in the elaborate
ritual associated with buying a new car.
Perhaps my willingness to h ag gle stemmed from my
unlikely triumph the last time around. I had gotten an
estmate faxed to me-this was pre-Internet-of what
a fair price was to pay for the car. Stupidly, I left the
sheet of paper at home, but I thought I remembered the
price. I fought hard for that price: threatening repeat
edly to leave, back and forth and back and forth, and
finally I got the dealer within a few hundred dollars of
the price I remembered. When I got home, I discov
ered that my memory had transposed two digits; the
price on the fax was actually $2,000 higher than the
one I managed to bargain. Mistakenly believing a fair
price was $2,000 lower than it really was, I had bar
gained incredibly hard and gotten a ridiculously good
deal. Leaving that fax at home was worth thousands of
dollars.
So I got to the car dealership and sat down to bargain.
The salesman explained to me that the price they were
offering was well below invoice, discreetly showing
me sorne pricing documents stamped "confidential,"
emphasizing how much money they were going to lose
on the car. I replied that he knew as well as I did that
the invoice price he was quoting me was not what the
dealership paid for the car. I asked him to simply give
62 WHEN TO ROB A BANK
me his best offer. He disappeared for a while, ostensi
bly to talk to his boss, but probably to catch up on who
was winning the baseball game.
He was gone just long enough for a third dealership
to e-mail me a price quote. This one was $1,500 lower
than the current best offer from the dealership where
I was sitting. He carne back and said the best he could
do would be to go $200 lower. I said, "That's not going
to work because another dealer just offered to beat that
price by over $1,000." I handed over my phone to show
him the e-mail. He disparaged the other dealership for
a while, and then he went and found the boss. The boss
assured me that their last offer was the very best they
could do-it was a generous offer for a dozen different
reasons.
I said, "That's all fine, but if you don't do better, I'm
going to walk out of here and go to the other dealership."
By my estimation, we were now about halfway
through the mating ritual. In about fifteen minutes,
after a lot of huffing and puffing, we would get the
car for the price the third dealership had offered. That
would still probably be paying way too much, but I was
willing to accept that outcome.
"So I'm going to walk out," I reiterated.
"Okay," the manager said. "If it doesn't work out at
that other dealership, come back and we will sell you
the car at the price we offered befare."
HURRAY FOR HIGH GAS PRICES! 63
I stood up and began to gather the kids, all part of
the tough bargaining act. They simply watched me, as
if they had forgotten that this was all part of the ritual.
Even if they had forgotten their lines, I still remem
bered mine. "We both know that if I walk out of here
today, I am never coming back."
To which the guy simply said, "We're willing to take
our chances on that."
And I walked out.
I was shocked. This dealership had sent me a price
over the Internet, come down only $200, and then
smiled as I left to buy a car from another place. Given
that, I figured the new dealer must be giving us a really
good deal. I didn't have the energy to start another
mating dance with the new dealership, so I simply
accepted their offer without bargaining. I pick the car
up on Tuesday.
FOR $25 MILLION, NO WAY-BUT FOR
$50 MILLION I'LL THINKABOUT IT
(SOL)
At least for me, there are not too many questions that
would lead me to respond, "For twenty-five million, no
way-but for fifty million I'll think about it." Twenty
five million dollars is so much money that it's hard to
think about what you would do with it. It sure would
 HURRAY FOR HIGH GAS PRICES! 65
64 WHEN TO ROB A BANK

sure that upping the ante will push a wavering Pakistani

be nice to have the first $25 million but I'm not
over the edge of collaborating with the U. S. government.
why I'd need the second $25 million.
s in Much more important, but harder to do, would be
T he U.S. Senate is hoping there are sorne folk
way. to find a way to make it credible that we will actually
Afghanistan or Pakistan who don't see it that
nty on pay the bounty. I'm sure there is plenty of discretion in
Frustrated by the failure of the $25 million bou
ate has deciding to whom and how much of that bounty gets
Osama bin Laden to lead to his capture, the Sen
(T he paid. For instance, if I did sorne statistical analysis that
voted 87-1 to raise the bounty to $50 million.
from somehow narrowed down his whereabouts to within
lone dissenter was Jim Bunning, a Republican
one thousand yards, and then the Navy SEALs can
Kentucky.)
the vassed that area and found him, would I get the money?
At one level, you have to applaud this move by
is an I'm not so sure they would give it to me. I'm guessing
government. To a Pakistani peasant, $50 million
. gov the Pakistani peasant who has sorne information on Bin
unthinkably large amount of money. To the U.S
in Iraq, Laden probably shares my doubts.
ernment, which is spending $10 billion a month
ar goals
$50_million is next to nothing. If one of the maj
, think Indeed, no bounty was ultimately paid. As reported by
of the Iraq war was to get rid of Saddam Hussein
a reward ABC News, ccthe raid that killed the al Qaeda leader in
how much cheaper it would have been to offer
out of Pakistan on May 2 [2011] was the result of electronic
of, say, $100 billion to anyone who could get him
himself intelligence, not human informants . . . The CIA and
office by whatever means they saw fit. Saddam
ed the the military never had an al Qaeda operative as an
might have graciously accepted the offer and trad
0 billion informer willing to give him up."
hassles of running a country for a pleasant $10
pension and a well-appointed French manar.
ues
Indeed, we have written befare about the virt HOW MUCH WOULD PEPSI PAY TO
work on
of offering big prizes to encourage people to GET COKE'S SECRET FORMULA?
roving
problems, whether it is curing disease or imp (SDL)
Netflix's algorithms.
erence Sorne dastardly Coca-Cola employees recently got
On the other hand, if I can't tell the diff
't imagine nabbed trying to sell corporate secrets to Pepsi. Pepsi
between $25 million and $50 million, I can
66 WHEN TO ROB A BANK
turned the bad guys in and cooperated in the sting
operation.
Did the executives at Pepsi give up the chance to
make huge profits at Coke's expense in order to "do the
right thing"?
I had lunch yesterday with my friend and colleague
Kevin Murphy yesterday. He made an interesting
point: knowing Coke's secret formula is probably worth
almost nothing to Pepsi. Here is the logic.
Let's say that Pepsi knew Coke's secret formula and
could publish it so that anyone could make a drink that
tasted just like Coke. That would be a lot like what hap
pens to prescription drugs when they go off patent and
generic drug companies come in. The impact would be
that the price of real Coke would fall a lot (probably
not ali the way to the price of the generic Coke knock
offs). This would clearly be terrible for Coke. It would
probably also be bad for Pepsi. With Coke now much
cheaper, people would switch from Pepsi to Coke. Pepsi
profits would likely fall.
So if Pepsi had Coke's secret formula, they wouldn't
want to give it away to everyone. What if they instead
kept it to themselves and made their own drink that
tasted exactly like Coke? If they could really convince
people that their drink was identical to Coke, then the
new Pepsi-made version of Coke and the Real Thing
HURRAY FOR HIGH GAS PRICES! 67
would be what economists call "perfect substitutes."
When two goods are essentially interchangeable in
consumers' minds, that tends to lead to fierce price
competition and very low profits. Neither Coke nor
the Pepsi knockoff of it would be very profitable as a
consequence. With the price of Coke lower, consum
ers would switch away from the original Pepsi to either
Coke or the new Pepsi-made Coke knockoff, which
would be far less profitable than original Pepsi anyway.
In the end, both Coke and Pepsi would likely be
worse off if Pepsi had Coke's secret formula and acted
on it.
So, maybe the executives at Pepsi were acting mor
ally and honorably when they turned in those suspected
of stealing Coke's secrets.
Or maybe they are just good economists.
CAN WE PLEASE GET RID OF
THE PENNY ALREADY'?
(SJD)
What began as a casual observation somehow turned
into a crusade., with Dubner becoming an unofficial
spokesman far the abolition of the penny. During a
60 Minutes segment on the subject., he said the U S.
suffers from ''pennycitis., " and that the penny is about
68 WHEN TO ROB A BANK
as useful as "having a flfth and a half finger on your
hand." Below are excerpts of various anti-penny posts.
Whenever I get change for a dallar, I ask the cashier to
keep the pennies. They aren't worth my time, or hers,
or yours. Sometimes the cashier refuses for bookkeep
ing purposes, in which case I politely accept the pen
nies and then throw them in the nearest trash can. (Is
this illegal? If so, then I guess we should start arresting
people for throwing money in wishing wells, too.)
If I were the type of person who regularly a) loaded
up my pocket every day with loose change or b)
brought all my loose change to a bank or supermar
ket coin machine, then it might be worthwhile to keep
the pennies. But I'm not, and so it's not. These facts,
coupled with the reality of inflation, have led me to
wish for years that the penrty would be abolished, and
probably the nickel, too. (When we were kids, playing
Monopoly, we never used the one-dollar bills; did you?)
There are all kinds of reasons to get rid of the penny,
but perhaps the only one you need to know is that it
costs the U.S. Government a lot more than one cent to
make a penny. Considering that we lose money every
time a penny is made, and that they aren't useful in
any meaningful way, it seems like a no-brainer that we
should get rid of the penny. Inflation has rendered it a
bad idea, for both producer and consumers.
HURRAY FOR HIGH GAS PRICES! 69
But I am happy to see that there is a sensible alter
native to throwing away loose change: "rebasing" the
penny to make it worth five cents. The plan comes
courtesy of Fram;ois Velde, an economist at the
Chicago Fed. I'd like to think that the serious people
in charge of our nation's currency wi!J take this argu
ment seriously, but considering what I know about the
penny, and politics, and inertia, I'm not holding my
breath.
Why does the U.S. still use pennies? One big reason:
lobbyists. I recently appeared on a 60 Minutes seg
ment called "Making Cents." I discussed the foolish
ness of keeping the penny; but 60 Minutes included
the pro-penny position as well. Here's an excerpt:
Mark Weller is the voice of "Americans for Com
mon Cents," a pro-penny group that claims that
rounding up will cost Americans $600 million a
year . . . He says without the penny, charities, too,
would suffer, on the theory that people are less
likely to donate as many nickels. As it is, penny
drives around the country collect tens of millions of
dollars a year for medical research, for the home
less, for education . . .
But as Weller freely admits, he's got a financia!
interest in the high cost of penny pinching: Weller
70 WHEN TO ROB A BANK
is a lobbyist for Jarden Zinc, the Tennessee com
pany that sells those little blank discs for the mint
to turn into Lincoln pennies.
I guess instead of wasting my time arguing against
the penny, 1 should just buy sorne zinc futures.
The Great Penny Debate continues to limp along.
One hundred million pennies, collected by schoolchil
dren, were put on display at Rockefeller Center. Mean
while, lots of people continue to argue for elimination
of the penny.
I am firmly on the abolitionists' side. The only rea
sons I can think of for keeping the penny are inertia
and nostalgia. Talk about deadweight loss !
The most ridiculous pro-penny defense I've seen in
a while appeared in a recent full-page ad in the Times.
It was taken out by Virgin Mobile, which was promot
ing its texting service as so cheap to use that it made
even a penny worth keeping. The headline read:
"New Legislation Will Attempt to
DO AWAY WITH THE PENNY.
What's Next, Puppies and Rainbows Too?"
Here is the line that caught my attention:
HURRAY FOR HIGH GAS PRICES! 71
And what does America think? 66%* of our popu
lation wants to keep the penny and 79 % would stop
to pick one up off the ground.
If you follow that asterisk to the bottom of the ad,
here's what you find:
*Source: The 8th Annual Coinstar National
Currency Poll
For those of you who don't know, Coinstar is the
company that puts change machines in supermarkets,
in which you can dump your coin jar and receive a
receipt that you take to the cash register for folding
money. Coinstar apparently takes a commission of 8.9
percent for providing this service.
While the Coinstar National Currency Poll is said
to be compiled by an independent market research
organization, I am somehow not very surprised that a
survey commissioned by a company that makes money
from coin hatvest-ingj_ale to produce a result saying
that two-thirds of Americans "want to keep the penny."
I never set out to be anti-penny, but somehow it hap
pened, and I now publicly rant whenever possible that
the penny should be eliminated.

72 WHEN TO ROB A BANK
penny is lousy
While I stand by my belief that the
e up with a use
as currency, someone has finally com
r my extinction
for pen nies that has made me reconside
argument: make a floor out of them!
ndard Grill
The penny floor can be found at the Sta
the one strad
at the new Standard Hotel in New York,
s us that it used
dling the High Line. The Standard tell
pennies in all.
250 pennies per square foot, or 480,000
home renova
For those of you thinking about a
ring materials.
tion, that's $2.50 per square foot in floo
ss tile ($25), pol
That stacks up pretty well against gla
even prefinished
ished marble ($12), porcelain ($4), or
ut the penny's
walnut ($5). It tells you something abo
ugh it is actual
uselessness as a currency that, even tho
other materials
money, it is still cheaper than all these
to ma ke a floor out of.
PLANNED PARENTHOOD GETS FREAKY!
(SDL)
For a long time, the pro-life movement has had a keen
sense of how people respond to incentives. Protesters
outside of clinics proved to be a very effective strategy for
raising the social and moral costs of seeking an abortion.
Now a Planned Parenthood clinic in Philadelphia
has come up with a very clever strategy for fighting
back, called Pledge-a-Picket. As they explain:
HURRAY FOR HIGH GAS PRICES! 73
Every time protesters gather outside of our Locust
Street health center, our patients face verbal attacks
from them. They see graphic signs meant to con
fuse and intimidate ... We are all called murder
ers, are lectured to about committing sins, and are
told we will pay the "ultimate price" for our actions.
Here's how it works: You decide on the amount
you would like to pledge for each protester (mini
mum 10 cents). When protesters show up on our
sidewalks, Planned Parenthood Southeastem Penn
sylvania will count and record their number each
day... We will place a sign outside the health
center that tracks pledges and makes protesters
fully aware that their actions are benefiting PPSP.
At the end of the two-month campaign, we will
send you an update on protest activities and a pledge
reminder.
My prediction: abortion clinics around the country
will soon be adopting this approach. What I think is
so clever about this approach is the way it transforms
the outrage, anger, and helplessness that ardent pro
choice folks feel toward the protesters into a financial
incentive that works on behalf of the pro-choice people
and against the protestors.On the margin, I think that
donations will be higher because potential donors can
then derive pleasure from the presence of the protesters,
 HURRAY FOR HIGH GAS PRICES! 75
NK
74 WHEN TO ROB A BA

wering. On the other If you are a homeowner, how bad do you feel about
or at least less pain. It is empo
te the idea that what this? You should feel pretty bad, but I'm guessing you
hand, if I am a pro tester, I will ha
ed Parentho od stron- would feel a lot worse in the following scenario: home
I am doing may be making Plann
test. prices did not fall at all last year, but one day you took
ger, decreasing the utility of the pro
$18,000 out of the bank to pay cash for a new car, and
someone then stole your wallet with the $18,000 in it.
UND,
LOST: $720 BILLION. IF FO At the end of the day, your wealth would be the same
R,
PLEASE RETURN TO OWNE (down $18,000, either from depreciation of the value of
PREFERABLY IN CASH your home or because the money was stolen), but one
(SDL) loss is psychologically far worse than the other.
r index of housing There are many possible teasons for why it doesn't
According to the S&P/Case-Shille
6 percent in the U.S hurt so much to lose money on an asset like a house.
prices, home prices fell by about
gh calculations, that First, it isn't very tangible, since no one really knows
over the course of 2007. By my rou
t about $720 billion what their house is worth anyway. Second, it hurts less
means that homeowners have los
is about $2,400 for whenever everyone else is also losing on their houses.
in wealth as a consequence. That
,000 for the average (I once heard a very rich person say that he didn't
every person in America, and $18
care about his absolute wealth, only what his ranking
home owner.
however, that loss was on the Forbes list of richest people.) Third, you
Relative to stock market declines,
k quite so big. The can't really blame yourself for house prices falling, but
of $720 billion in a year doesn't loo
stock markets is the you could second-guess your decision to carry around
total market capitalization of U.S.
al value of the hous $18, 000 in cash. Fourth, the fact that a thief has your
same order of magnitude as the tot
llion). In one week money might make it worse than the money just evap
ing market (between $10 and $20 tri
ck market lost over orating into space, like it <loes when house prices fall.
during October 1987, the U.S. sto
There are probably other reasons as well.
30 percent of its value.
ut the same mag- More generally, the economist Richard Thaler coined
The $720 billion figure is also abo
U.S. government the phrase mental accounts to describe the way in which
nitude as the amount of money the
st few years. people seem to treat different assets as non-fungible,
spent on the war in Iraq for the fir
76 WHEN TO ROB A BANK HURRAY FOR HIGH GA
S PRICES! 77

even though in principle it seems like they should be. singer-songwriter Jane Siberr
y has decided to offer
Although my economist friends make fun of me far it, I her wares to the public via an
honor-system payment
definitely use mental accounts myself. Far me, a dallar scheme. She gives her fans fau
r choices:
made playing poker means much more than a dallar
earned from the stock market going up. (And a dallar l. free (gift from Jane)
lost playing poker is likewise far more painful.) 2. self-determined (pay now)
Even peopl who deny that they are affected by
mental accounts often fall prey to them. I've got a 3. self-determined (pay later so
you are truly
buddy in that category who won a big bet on NFL educated in your decision)
faotball (big relative to bis usual faotball bet, but very, 4. standard (today's going rate is
about .99)
very small relative to his overall wealth) and the next
day he spent the proceeds on a fancy new driver.
What does this all mean far housing prices? Well, if Then, cleverly, she posts statis
tics on payment rates
prices start going back up, it would be a lot more fun if to date:
the price increases carne in the farm of little packets of
cash dropped outside your front door with the morn o/o Accepting gift from Jane: 17%
ing newspaper, rather than via house appreciation. lo Paid by determining price: 37%
I suppose all those people who took out home-equity % Paying Later: 46 %
loans figured this out a long time ago.
Avg. price per track: $1.14
% paid below suggested: 8 %
HOW IS A CANADIAN ART-POP SINGER % paid at suggested: 79%
LIKE A BAGEL SALESMAN? % paid above sugges ted: 14%
(SJD)

Much like Paul Feldman, the economist-turned Even more cleverly, Siberr y posts
the average pay
bagel salesman we wrote about in Freakonomics, the ment rate far each song as you pu
ll your payment option
78 WHEN TO ROB A BANK HURRAY FOR HIGH GA
S PRICES ! 79

from the drop-down menu-another reminder that, pay as they wish to downloa
d Siberry's music. I liked
hey, you're more than welcome to steal this music but the idea, and blogged about .
it But here's what Siberry
here's how other people have acted in the recent past. wrote on her MySpace journ
al today:
It seems that Ms. Siberry grasps the power of incen
tives quite well. This allows for at least a couple of The "self-determined pricing
" policy of the store is
interesting things to happen: people can decide what in the spot light again, freak
onomics has an onlin e
to pay after they hear the music, and see how much article; abe news emailed.
I don't want the atten
it's worth to them (it looks like people generally pay tion. I think I'll change the
pricing to "you can pay
the most per song under this option); and it takes the me all you want but i'm not
going to let you hear it."
variable-pricing scheme that economists love and puts
it in the hands of the consumer, not the seller. Youch. Regrets, Ms. Siber
ry. Seems like we have a
I think record companies will need a lot more con lousy track record with po
p singers-anybody remem
ber when Leviu announce
vincing before they're willing to try this model on a d that Thomas Dolby wa
releasing a new record, an s
large scale. Presumably, Jane Siberry fans who go to announcement that turned
. out to be 100 percent wron
her website to get her music are a deeply self-selectmg g?
lot ' far more devoted than the average downloader. But I gu ess we should give up
pop singers and stick to
as desperate as the record companies are, I wouldn't b e crack dealers, real-estate ag
ents, and poker cheats.
surprised to see more of this in the future.
HOW MUCH TAX ARE
TWO DAYS LATER ATHLETES
WILLING TO PAY'?
(SJD)
JANE SIBERRY SNAP S The Laffer curve is a unico
(SJD)
rn-y concept that seeks to
explain the rat e of taxation
at which re venues will fall
Apparently, Jane Siberry doesn't appreciate people because earners either mov
e away or decide to earn les
(or cheat more, I guess). s
calling attention to her website, which allows people to
80 WHEN TO ROB A BANK HURRAY FOR HIG
H GAS PRICES! 81

If I were a tax scholar interested in this concept, "By fighting outside the
country, as he's doing in
I would be taking a good, hard look at the current this Rios figh t, Manny
doesn't have to pay U.S.
behavior of top-tier professional athletes. Boxing is taxes anym ore-at a rate
of 40 % for a foreign
particularly interesting because it allows a participant athlete.
to choose where he performs. If you are a pro golfer or "If this pay-per-view
and other things take off
tennis player, you might be inclined to skip a particular like we think they may, 1
can't imagine Pacquiao
event because of a tax situation, but you generally need wiII ever again figh t in the
U.S."
to play where the event is happening. A top-ranked
boxer, meanwhile, can fight where he gets the best deal. There are of course oth
er factors at play besides
Which is why it's interesting to read that Manny taxes-gambling, for one
, which is a big reason
Macau has become such a that
Pacquiao will probably never fight in New York boxing center. But what
primarily, says promoter Bob Arum, because of the ever you t hink of the La
ffer curve, it's hard to ig
the variance in tax rates nore
taxes he'd have to pay. From the Wall Street ]ournal: aroun d the world, esp ecia
for athletes who might ea lly
rn a lot of money in a sh
time. ort
Manny Pacquiao has won fights in California, Ten
nessee, Texas and Nevada, not to mention Japan In January, the golfer Ph
il Mickelson said he was
and his native Philippines. But with Pacquiao in "going to have to mak
e sorne drastic changes"
<leal with federal and Califo to
New York this week to promote his next fight-a rnia tax hikes (he lives in
November bout in Macau against Brandon Rios California). "If you add up
all the Federal and you lo
at the disabilit y and the un ok
Pacquiao's team said Barclays Center and the employrnent and the Socia
Security and the state, my l
Garden were two venues where he wouldn't fight tax rate's 62, 63 percent,"
said. he
because he would have to pay the state's tax rate in
addition to federal taxes. "He'd have to be a luna His accounting was chall
enged and Mickelson, on
of the rnost popular golfe e
tic," said Bob Arum, Pacquiao's promoter. rs ever, was widely span
for pu blicly airing his tax ked
dissent. So last month, wh
he won back-to-back tou en
In an L.A. Times article, Arum says that Pacquiao rnaments in Scotland (th
Scottish Open and the Op e
may never fight anywhere in the U.S. again: en Charnpionship), he kept
82 WHEN TO ROB A BANK HURRAY FOR HIGH GAS PRICES! 83

quiet. But the media did the speaking for him. In PRICING CHICKEN WINGS
Forbes, Kurt Badenhausen wrote a (very good) article (SOL)
about Mickelson's British tax tab, estimating that he'd
pay, in total, about 61 percent tax on his nearly $2.2 The other day, I stopped by a local fried
chicken joint,
million in earnings. And Badenhausen identifies this Harold's Chicken Shack. Just to give you
a sense of what
interesting wrinkle: sort of restaurant this is, there is a laye
r of bulletproof
glass separating the workers and the cus
tomers. They
But that's not all. The U.K. will tax a portian of his don't Cook the chicken until you arder,
so I had five or
endorsement income for the two weeks he was in ten minutes to kill waiting for my foo d.
Scotland. It will also tax any bonuses he receives One of the items on the menu is a chi
cken-wing
for winning these tournaments as well as a portian dinner. With each dinner, you get a
fixed amount of
of the ranking bonuses he will receive at the end of french fries and coleslaw.
the year, all at 45% ... The two-wing meal costs $3.03. The
three-wing
The U.K. is one of few countries that collects meal costs $4.50.
taxes on endorsement income for non-resident ath Since the only difference between the
two meals is
letes that compete in Britain (the U.S. also does). one extra wing, with that third wing
casting the cus
The rule has kept track star Usain Bolt from com tomer $1.47. I thought this was interes
ting, because if
peting in Great Britain since 2009, outside of the each of the first two wings were priced
at $1.47 each.,
2012 Summer Olympics when the tax was sus then the implied price of the french frie
s and coleslaw is
pended as a condition for hosting the Games. a combined 9 cents. So it seems like Ha
rold's is implic
Spain's Rafael Nadal has also allowed U.K. tax itly charging more for the third wing tha
n for the first
policy to dictate his tennis playing schedule. two wings, which is unusual since firm
s generally give
quantity discounts.
And let's not forget that the greatest endurance ath I read further down the menu:
lete of our era, Mick Jagger, fled the U.K. years ago
because of tax considerations (and, also, the police two-wing meal $3.03
there kept arresting him and his mates). three-wing meal $4.50
84 WHEN TO ROB A BANK
HURRAY FOR HIGH GAS PRICES! 85

four-wing meal $5.40

five-wing meal $5 .9 5
The four-and five-wing meal prices are more in line
with how firms usually price .
So what do you think Harold's charges for a six-wing
meal? Here's the answer:
six-wing meal $7.00
Definitely most bizarre. When economists see things
that don't make any sense, we can't help but think of
sorne story that rationalizes the seemingly odd behav
ior. Maybe Harold's prices the six-wing meal high
e
because it is worried about obesity? Not likely, sinc
every itero on the menu is fried. Is the sixth wing espe
r six
cially big or tasty? Is demand by people who orde
wings more inelastic?
Perhaps sorne clues could be found in the pricing of
other items. Fried perch are sold in a similar fashion
to fried chicken, again with french fries and coleslaw.
Here is how perch is priced:
2-piece perch meal: $3. 5 8
3-piece perch meal: $4.69
4-piece perch meal: $6.45
So you get that third piece of perch cheap, but they nail
you on the fourth piece. This certainly hints at Harold's
thinking there is sorne logic to this sort of pricing.
Ultimately, though, my guess is that the person
who chose these prices was just confused. One thing I
have realized as I have worked more with businesses is
that they are far from the idealized profit-maximizing
automatons of economic theory. Confusion is endemic
to firms. After ali, firms are made up of people, and
if people are confused most of the time by economics,
why wouldn't that carry over 'to firms?
WHY ARE KIWIFRUITS SO CHEAP?
(SJD)
I've been eating a lot of kiwifruits lately. (You may also
know them as the Chinese gooseberry.) At the corner
deli near my home on the West Side of Manhattan, I
can buy three for a dollar. They are delicious. Unless
the stickers are lying, they come from New Zealand.
At thirty-three cents apiece, a New Zealand kiwifruit
costs less than the price of mailing a letter to the East
Side of Manhattan. (And believe me, 1 consider a first
class stamp one of the greatest bargains ever.) How on
earth can it cost so little to grow, pick, pack, and ship a
piece of fruit across the world?
86 WHEN TO ROB A BANK
To make fruit matters more complicated, I can
buy one banana (also imported) and one kiwifruit for
about the same price as one apple, which may well have
been grown as near as upstate New York. So_ I wot
to Will Masters, a food economist at Tufts Un1vers1t y s
Friedman School of Nutrition.
Most economists, as I'm sure you know, reply to
such queries in vers,e, and Will is no exception:
Damn supply and damn demand:
Why cheap hogs and costly ham?
Bargain wheat, expensive flour,
The oldest villain's market power.
Just one seller makes us nervous,
Like that U.S. Postal Service:
They may offer bargain prices,
But who disciplines their vices?
Middlemen have long been blamed
For every market that's inflamed,
Yet better explanations come
From many a Hyde Park alum.
Modern views from Chicago-Booth
Give a nuanced view of truth,
Steven Levitt and ]ohn List
Made each of us a freakonomist.
HURRAY FOR HIGH GAS PRICES! 87
We Jet data speak its mind
No matter what Friedman opined
And find the price o fruit and veg
To be driven by the market's edge.
Like the tail that wags the dog,
Marginal thinking clears the fog:
Sellers, buyers, traders too,
Interact and prices ensue.
A kiwi costs 33 cents
Simply because no one prevents
Another farm or New York store
From entering and selling more.
In contrast apples may be dear,
For reasons that will soon be clear:
Picking them's below our station,
To lower costs we need migration.
Bananas have a different story,
Seedless magic, breeder's glory,
Cheap to harvest and to ship,
Who cares if workers get paid zip?
Each crop's method of production,
Where it grows and how it's trucked in,
Satisfies sorne needs quite cheaply
While other costs will rise more steeply.

88 WHEN TO ROB A BANK
A buyer's choices matter too,
For nonsense stuff Jike posh shampoo,
Prices are not down to earth,
The more you pay the more it's worth.
Behavior is as behavior does,
Maybe some things are "just because,"
Much of life's a mystery,
A habit due to history.
For prices, though, it's competition
Plus tariffs set by politicians,
That determines whether we see
Such delightfully cheap kiwi.
Bravo.
PE TE ROSE PROVIDES A LESSON
IN BASIC ECONOMICS
(SDL)
Sorne time ago, Pete Rose signed a bunch of baseballs
with the inscription "I'm sorry I bet on baseball."
According to media reports, he gave these balls to
friends and never intended them to be sold for profit.
But the estate of someone who received sorne of
these balls decided to put thirty of them up for auction.
HURRAY FOR HIGH GAS PRICES! 89
There was speculation that they would sell for perhaps
many thousands of dollars.
That is when Rose himself stepped in and delivered
one of the fundamental lessons in economics: as long as
close substitutes are available, prices won't get very high.
When Rose heard that these halls were being auc
tioned, he offered to sell halls with the same inscription
for just $299 on his own website, effectively destroying
the market for the auction-bound halls. True, the newly
signed halls wouldn't be perfect substitutes, because a
collector could still say he had one of the original thirty.
For that reason, you wouldn't expect the auction price
of the old halls to fall all the way to $299. Indeed, the
auction was called off and the halls were sold for $1,000
apiece.
(Hat tip to John List, the only baseball-memorabilia
salesman-turned-economist I know.)
IF ONLY GOD HAD HAD CORPORATE
SPONSORSH IP .
(SJD)
... in the book of Genesis, when the world is created.
Can you imagine how rich He could have gotten by
selling the naming rights of every animal, mineral, and
vegetable?
90 WHEN TO ROB A BANK
If God was unlucky to toil in the days befare cor
porate sponsorship, the Chicago White Sox are not so
unlucky. They have just announced that for the next
three seasons, their evening home games will begin at
7:11 P.M. instead of the customary 7:05 P.M. or 7:35 P.M.
Why? Because 7-Eleven, the convenience store chain,
is paying them $500,000 to do so.
l've lately noticed advertisements showing up in a
lot of unlikely venues: stamped onto fresh eggs and
printed on airplane barf bags, for instance. But I have
to admit there is something particularly creative about
affixing a value to time itself, especially if you can cap
ture that value for your own benefit.
Maybe I will write more about that tomorrow.
WHAT CAPTAIN SULLENBERGER MEANT
TO SAY (BUT WAS TOO POLITE TO DO SO)
(BY "CAPTAIN STEVE")
Captain Steve is a seasoned international pilot for
a major U.S. carrier and a friend of Freakonomics.
(Given the sensitivity of what he writes, he prefers ano
nymity.) This post was published on ]une 24, 2009,
six months after the "The Mira ele on the Hudson,"
in which Captain Chesley Sullenberger safely landed
an Airbus A320-200 in the Hudson River. Both the
HURRAY FOR HIGH GAS PRICES! 91
plane's engines had failed, due to a bird strike, shortly
after takeoff from LaGuardia Airport in New York.
After reading sorne of the excerpts of Cap
tain Sullen
berger's various speeches, especially tho
se of a few
weeks ago with the National Transporta
tion Safety
Board, 1 would like to add my editorial.
Captain Sullenberger has been a class
act all the
way. He's not been petty, pious, or egotist
ical. He is,
however, like most of the captains I kno
w and, more
broadly, most of the pilots I know. Wh
y? He doesn't
need to be otherwise. When someone has
accomplished
what he and the seores of men and wom
en like him
have accomplished, why do we need to boa
st?
He implies that what he <lid while serv
ing as the
"skipper" of US Airways flight 1549 was
simply his
job. He is being as honest and accurate
as he can be:
"Please, no fanfare, no applause, just doi
ng my job."
But what he has also alluded to in sorne of
his speeches
is that it has taken years, even decades, to
prepare him
self for that one single "lifetime event"
of guiding his
jet into the safe, smooth landing on the Hu
dson River.
What he is not saying is this:
We, the airline pilots, are facing a losing
battle in
the PR department. You believe that we
make huge
salaries and are treated like royalty. Pure
fiction. Why
92 WHEN TO ROB A BANK
have we been losing this battle for such a long time?
Simple. Because most of us are like "Sully"; we don't
want applause or fanfare for doing what we are trained
to do. However, we do realize that we should be fairly
compensated for what we have achieved to get this job
and what we continue to do on a daily basis to keep it.
This backlash of pilot-bashing is building to a boiling
point.
Regional carriers, like the Colgan Airlins flight in
Buffalo [which crashed, killing all forty-nine aboard],
employ the lowest-bidder pilots. No offense to them;
this is not personal. It is the system that is at fault.
Money and profits at all cost.
Airline history lesson 101: it used to be, up until the
mid 1980s, that a young pilot would be hired on at a
major carrier, become a flight engineer (FE), and then
spend a few years managing the systems of the older
generation airplanes. But he or she was learning all the
while. These new "pilots" sat in the FE seat and did
their job, all the while observing the "pilots" doing the
flying, day in and day out.
The FEs learned from the seasoned pilots about the
real world of flying into the O'Hares and LaGuardias.
They learned decision making, delegation, and the
reality of "captain's final authority" as confirmed in
the law. When they got the chance to upgrade, they
HURRAY FOR HIGH GAS PRICES! 93
became a copilot. The copilot's duty was to assist the
captain in flying; but even during their time as the new
copilot, they had the luxury of the FE Iooking over their
shoulders-i.e., more leaming. This three-man-crew
concept, now a fond memory in the domestic markets
but used predominately in international flying, was
considered one more layer of protection.
But it's gone. Now domestic flying is being shifted
to the regional carriers, like Colgan, American Eagle,
Comair, and Mesa, to name a few. These consist of the
lowest bidders and the newest pilots flying into the
harshest of environments. The airline management
teams would say that it works and that this is routine
flying. I beg to differ.
Analogy: you are told you need a quadruple bypass.
Now you search the Internet for the cheapest price you
can get, and you rush to schedule the operation because
there are only two dates that you can get that cheap
rate.
Do any of us do that? No. What do we do? We get
second opinions, we ask who is the best in town, etc. We
ask: "Is there anyone who has been doing this surgery
for the last twenty to twenty-five years?" We don't say,
"Let me use someone who just graduated from medi
ca! school and was rushed through residency because it
will be cheaper."
94 WHEN TO ROB A BANK HURRAY FOR HIGH GAS PR
ICES! 95

Why not apply the same logic that the public uses to less over the heartland of America rat
her than over the
buy an airplane ticket to this surgery scenario? Bypass Atlantic? It certainly is if you are on
the Iow-cost regional
surgery is routine, right? Sorne surgeons do two, three, carrier. If you are on such a plane hea
ded to Denver and
or four a day. It must be easy. the engine is on frre, I am sure it is
comforting to know
To take that a step further, how many surgeons have that you saved 15 percent by scouri
ng the Internet for
to retake their medical boards every nine months in the cheapest fare. Isn't it great to know
that you have the
order to be qualified? Airline pilots do. We are subject newest, least-experienced, exhaus
ted, starving young
to simulator check-rides every nine months to demon cockpit crew that this regional air
line could find?
strate knowledge, proficiency, and ability. Did I say starving? Yeah, I did.
Did you know that
How many surgeons have to take a physical exam these regional crews can work
for twelve to thirteen
every six months by the AMA in order to work? None! hours every day, flying five to- eight
Iegs a day, but their
Airline pilots do. Fail your medica! exam and you're airline <loes not feel it's importa
nt nough to provide
done! How many surgeons (or any other critical pro foo d for them? They are alread
y on welfare wages,
fessional, including politicians) are subject to random and now they have to find time
and money while on
drug and alcohol testing? None. the ground for twenty-five minu
tes to simply nourish
Flying across the North Atlantic is routine, right? themselves. It's a sad state of affa
irs. Remember, you
It wasn't just a short few decades ago. We, the pilots, bought the cheapest ticket.
make it routine because we have skills, experience, and
training like very few others. HURRAY FOR HIGH GAS
PRICES!
Gifted? No, not many of us are. But dedicated and (SDL)
focused upon excellence, you bet! I have told my kids
This post was published in ]une 20
one thing many times since they were little children: "I 07, when the aver
age price o[ regular gasoline in the
don't expect perfection, I expect excellence." I expect U. S. was $2. 80 per
gallan, having risen dramatically
100 percent effort in ali you do. This is the creed of in previous months.
A year later, the price would hit
every pilot I know. $4. As of this writing
(January 2015), the price has fallen
Flying from Chicago's O'Hare to Denver is routine, all the way to $2.06
per gallan. So even without adjust
right? We, the pilots, make it so. But is your life worth ing for inflation, gas
96 WHEN TO ROB A BANK HURRAY FOR HIGH GAS PRICES! 97

when this post was

is 26 percent cheaper now than The answer, at least based on the evidence I could
nwhile, hasn't been
written. The federal gas tax, mea find, may surprise you.
raised since 1993. The most obvious one is congestion. Traffic jams are
a direct consequence of too many cars on the road. If
oline in the
For a long time I have felt the price of gas you took sorne cars away, the remaining drivers could
ch all econo
United States was way too low. Pretty mu get places much faster. From Wikipedia's page on traf
e that the
mists believe this, and also believe therefor fic congestion:
gas tax should be raised substantially.
t there are
The reason we need high gas taxes is tha The Texas Transportation Institute estimates that
that I don't
all sorts of costs asso ciated with my driving in 2000 the 75 largest metropolitan areas experi
at economists
pay-someone else pays them. This is wh enced 3.6 billion vehicle-hours of delay, resulting in
don't pay the
call a "negative externality." Because I 5.7 billion US gallons (21.6 billion liters) in wasted
Ideally, the
full costs of my driving, I drive too much. fuel and $67.5 billion in lost productivity, or about
through a gas 0.7 /o of the nation's GDP.
government could correct this pro blem
to drive with
tax that aligns my own private incentive
the social costs of driving. This particular study doesn't tell us what we really
h driving
Three possible externalities associated wit need to know for estimating how big the gas tax should
are the following: be. (We want to know how much adding one driver to
the mix affects lost productivity.) But it does get to the
a. My driving increases congestion for other point that, as a commuter, l'm better off if you decide
drivers. to call in sick today.
b. I might crash into other cars or pedestrians. A more subtle benefit of having fewer drivers is that
c. My driving contributes to global warming. there would be fewer crashes. Aaron Edlin and Pinar
Mandic, in a paper I was proud to publish in the ]ournal
consider
If you had to guess, which of those three of Political Economy, argue convincingly that each
n for a bigger
ations provides the strongest justificatio extra driver raises the insurance costs of other drivers
tax on gasoline? by about $2,000. Their key point is that if my car is
98 WHEN TO ROB A BANK
not there to crash into, maybe a crash never happens.
They conclude that the appropriate tax would gener
ate $220 billion annually. So, if they are right, reducing
the number of crashes is a more important justification
for a gas tax than reducing congestion. I'm not sure I
believe this; it certainly is a result I never would have
guessed to be true.
How about global warming? Every gallon of gas I
burn releases carbon into the atmosphere, presum
ably speeding global warming. If you can believe
Wikipedia's entry on the carbon tax, the social cost of
a ton of carbon put into the atmosphere is about forty
three dollars. (Obviously there is a huge standard of
error on this number, but let's just run with it.) If that
number is right, then the gas tax needed to offset the
global warming effect is about twelve cents per gallon.
According to a National Academy of Sciences report,
American motor vehicles burn about 160 billion gal
lons of gasoline and diesel each year. At twelve cents
a gallon, that implies a $20 billion global warming
externality. So relative to reducing congestion and low
ering the number of accidents, fighting global warm
ing is a distant third in terms of reasons to raise the
gas tax. (Not that $20 billion is a small number; it just
highlights how high the costs are from congestion and
accidents.)
HURRAY FOR HIGH GAS PRICES! 99
Combining all these numbers, along with the other
reasons why we should raise the gas tax (e.g., wear and
tear on roads), it seems easy to justify raising the gas
tax by at least one dollar per gallon. In 2002 (the year
I could easily find data for), the average tax was forty
two cents per gallon, or maybe only one-third of what
it should be.
High gas prices act just like taxes, except that they
are more transitory and the extra revenue goes to oil
producers, refiners, and distributors instead of to the
government.
My view is that, rather than bemoaning the high
price of gas, we should be celebrating it. And, if any
presidential candidate should come out in favor of a one
dollar-per-gallon tax on gas, vote for that candidate.
One hidden consequence of high gas prices: they Jead
to more traffic fatalities as drivers opt for smaller, fuel
efficient cars-and, increasingly, motorcycles. A 2014
study in the journal Injury Prevention found that in
California alone, a thirty- cent-per-gallon rise in gas
prices led to an extra eight hundred motorbike-related
deaths over a nine-year period.
 WHEN TO ROB A BANK 249

Perhaps he knew something about how the banks did

Chapter 9 business; perhaps his astrologist told him Thursdays

When to Rob a Bank

were lucky; perhaps it simply fit his schedule.
In any case, it reminded me of a story I heard upon
a recent visit to lowa, about a local bank employee
named Bernice Geiger. She was arrested in 1961 for
embezzling more than $2 million over many years.
The bank happened to be owned by her father. Bernice
rime was reportedlr very generous, giving away lots of the
We have aJways been attracted to c
but explorin g it.
stolen money. Upon her arrest, the bank went bust. She
no t doin g it, necessarily,
out subjects in was sent to prison, paroled after five years, and moved
One of the most-tal ked-ab
back in with her parents, who were apparently forgiv
ument t hat the legalization
Freakonomics was our arg n crime
ing types.
ble for driving dow
of abor tion was responsi landed By the time she was arrested, Geiger was said to be
rs Jat er. O ur Jove of crime almost
twen ty yea
sent to exhausted. Why? Because she never took vacations.
o t one of us
w k TV sho w, alm o st g
us a net or
This turned out to be a key component in her crime.
itle of this bo
ok.
o Bay , and did inspire the t
Guantnam As the story goes-this was told to me by a retired
Sioux City cop, though I haven't been able to confirm
ANK
WHEN TO ROB A B
it-the reason she never took vacations was that she
was keeping two sets of books and couldn't risk a fill-in
(SJD)
employee discovering her embezzlement.
read abo ut a m an wh o robbed six banks in
I recently was The most interesting part, according to the cop,
Jersey but only on Thursdays. "No reason .
New d. is that after prison Geiger went to work for a bank
ticular day," the article note
given for choosing that par ing oversight agency to help stop embezzlement. Her
biggest contribution: looking for employees who failed
to take vacation. This simple metric turned out to
250 WHEN TO ROB A BANK
have strong predictive power in stopping embezzle
o
ment.Like cheating schoolteachers or colluding sum
s
wrestlers, the people who steal money from bank
sometimes leave telltale patterns-whether it's a lack
of vacation or a string of Thursdays-that point the
finger right at them.
Ali this made me curious about bank-robbery statis-
tics in general. Maybe Thursday really is the best day
to rob a bank?
According to the FBI, there are roughly 5,000 bank
robberies a year in the U.S. Friday is easily the busi
est weekday ( there are relatively few robberies on the
weekend), with 1, 042 Friday robberies in a year; this
is followed by Tuesday (922 ), Thursday ( 885), Monday
( 858), and Wednesday ( 842).But there is no evidence
that any one day is more likely to be successful than
another.
It also appears as though robbers are not very good
at maximizing their return. Morning robberies yield
far more money than afternoon robberies ($5, 180
versus$3,705) and yet bank robbers are far more prone
to strike in the afternoon. (Maybe they like to sleep in?
And maybe if they were able to wake up earlier and
go to work, they wouldn't have to rob banks?) Overall,
U.S.bank robbers earn an average of$4, 120 when they
are successful.But they aren't successful as often as I
WHEN TO ROB A BANK 251
would have thought: they are arrested 35 percent of
the time! So the Jersey robber who made it to his sixth
Thursday was ahead of the pack .
The success rate of bank robbers in the U.K. is
about the same as in the U.S., but British robbers gen
erally get a lot more money. The economists Barr
y
Reilly, Neil Rickman, and Robert Wit t got hold
of
a trove of robbery data from the British Bankers
'
Association and analyzed it for a paper in Significance,
a publication of the Royal Statistical Society. The
y
found that the average proceeds from all bank raid
s
including the unsuccessful ones, was roughly $3 0, 000
Robberies with multiple robbers, they note, tend
to
yield considerably bigger jackpots.Overall, the aver
age raid yields about $1 8, 000 per robber. So that
's
substantially higher than their American coun
ter
parts.But again, the likelihood of arrest is high.Thi
s
leads the authors to conclude that "the return on
an
average bank robbery is, frankly, rubbish " and
that
"as a profitable occupation, bank robbery leaves a
lot
to be desired."
So if we want to know when is the best time to rob a
bank, the answer would seem to be ...never.Unle
ss'
of course, you happen to work at one.But even
then,
the trade-off is steep-for you may have to give
up
vacations forever.
 A BANK
252 WHEN TO ROB WHEN TO ROB A BANK 253

IME
WHAT'S THE REAL CR
for stolen clocks, towels, and mini-ba r items. (Po ssibly
I misunderstood why they checked the room, j ust as I
RATE IN CHINA?
st ruggled to understand why there was a fifteen-dollar
(SDL)
fee associate d with each lo st ke y car d, which couldn't
tainly suggest that crime
Official statistics would cer po ssibly have cost the hotel more than a few cents.)
Mur der rates are roughly
in China is extremely low. Third, places that no sensible person would ever
ited States ; accor ding to
one-fifth as high as in the Un want to break into (for instance, or phanages) were pro
crimes are rare. China
the official crime statistics, all tected by guardhouses and metal gates that had to be
afe . W e walked the st ree
ts in rich areas
cer tainl y fe els s
ret racted to let vehicles in. 1 don't think the gates were
a moment did l ever feel
and poor areas and not for The one to kee p the or phans in, but maybe the y were !
m pletely absent .
threatene d. Graffiti was co Four th, on the trains we took, they checke d our
sta nc wh r I th ou gh t I finally found sorne graffiti
in e e e tickets before we boar ded, while we were riding the
y of Shangrao, the spray
near a train station in the cit train, and also require d that the ticket be produced on
on a b rid ge t urned out to
be a govern
paint e d m es s ag e the way out of the station.
under the
ment warning th
at anyone caught defecating Finally, and most notably, public restroom s were
nished.
bridge would be se verely pu com pletely devoid of toilet paper, even in sorne reason
d behaviors that made 1t
Yet there were all sor ts of od ably nice restaurants. Again, maybe I'm co mpletely
ri m es were a big
problem .
seem like sorne c mi ssing something, but the i m pression was that a) toilet
d to b e an obs ession wi
th the risk
First, th er e se em e
paper was a ver y valuable co mmodity; and b) if it were
es felt the nee d
co nt f it m on ey. O ur to ur g uid
of u er e left in public restroo ms it would be stolen.
fake money: Whenever I
to teach us how to identify ee per went
o th in g wi th c urrency, the shopk
bo u gh t s me
to validate the legitim acy of DON'T REMIND CRIMINALS
through a variety of tricks
THEY ARE CRIMINALS
the bills . hotels ,
ut of sorne of our (SDL)
Second, when checking o r
delay while a hotel worke
there was a fifteen-minute Ps ychologists have long arg ued about the power of
resume to lo ok
in p ct th va ca ted ho tel roo m , I p
went to s e e
pri ming-i. e., the power of subtle c ues and reminders
 BANK
254 WHEN TO ROB A WHEN TO ROB A BANK 255

, there are a number

to influence behav ior. For instance "How many hours p er week do you watch television on
if you make a woman
of academic papers that find that average?" The result : 66 p ercent "hea ds" in t he treat
le her gender b efore
write down her name and circ ment where they ask about convi ctions and "only" 60
e will do substantially
worse than
ta ki ng a math test, sh p ercent "heads" in the TV treatment.
e idea is that women
if she just writes her name. Th How dishonest are p ri soners versus everyday p eople?
at math, a nd cir cli ng
p erceive that they are not go od When they play the same game with regular citiz ens,
them that the y are wo
men and
their gender remi nds the coin com es up "hea ds" 56 p er cent of t he tim e.

therefore should be ba
d at math. I' ve always been skep So how powerful is that one question on conviction?
tical of thes e results (a
nd indeed failed to replicate them The behavior of the prisoners who are asked the TV
Fryer and John List)
in one study I did with Roland question is actually closer to that of regular citi z ens
l part of our i dentit ies
because gender is such a powerfu than it is to the behavior of t he prisoners who were

that it 's h ard for me to

bel ieve that we need to remind primed.
women that the y are women! As an economist, I hate the idea t hat priming might
d "Bad Boys: The
In an interesting new study calle work. As an empiricist, I guess I better get use d to it .
Dishonest y," Ala in
Effec t of Criminal Identit y on
nd Thomas Noll find
Cohn, Michel Andr Marchal, a
They went into a WHAT DO REAL THUGS
sorne fascinating priming effects.
ad pr isoners privately THINK OF THE WIRE'?
maximum securit y pri son and h
many times the coin (SUDHIR VENKATESH)
flip coins and then report how
ea ds" they go t, th e
carne up "heads." The more "h Sudhir Venkatesh has become a familiar figure to
th e authors can' t tell
more mone y they received. While Freakonomics readers. During graduate school in
t, the y know th at on
if any one prisoner i s honest or no Chicago he embedded himself for several years with a
average "heads" come
s up half the time, so they can crack gang; this research formed the backbone of our
lying there is. Before
measure i n aggregate how much book chapter called "Why Do Drug Dealers Still Live
t he study, th ey ha d hal
f the prisoners answer the ques with Their Moms?" He continued to do fascinating
ther h alf
vic ted for?" and the o
tion "Wh at were you con research at the lowest and highest ends of the economic
256 WHEN TO ROB A BANK WHEN TO ROB A BA
NK 257
named our gather
spectrum, often writing about it for the Freakonomics ing "Thugs and Cuz." ("C
c. " . ,,
1.or cous1n -was me.) uz"-shor t
blog.
There ws plenty of po
pcorn, ribs, bad domestic
beer, and fned pork rin
Ever since I began watchi ng HBO's The Wire, I felt that . ds with hot sauce. The p
r mds, appa rently ork
the show was fairly authentic in terms of its portrayal the favorite of the Ame .
ran out s o quickly that nea n thug'
of moder n urba n life-not just the world of gangs and one of the low
-ra n kmg gang
member s m attendance was .
drugs, but the co nnections between gangland and City dispatched to acqurre sev-
era1 more bags.
Hall, the police, the unions, and practically everything
H re's a quick-and-dirty
else. It certainly accorded with my own fieldwork in . sum rnary of the evening's
h 1ghhghts:
Chicago and New York. And it was much better than
most academic and journalistic reportage in show
ing how the inner city weaves into the s ocial fabric of a 1. Te Bu is on the tak
e. Much to rny chagrin
city. sm ce he Is rn y favorite character), the con
sensus
A few weeks ago, I called a few respected street fig m the room was that the Bu
nk was guilty. In the
ures in the New York metro region and asked them ords of Shine, "H
e's too good not to be profi
to watch the show's new season. 1 couldn't thin k of a t
ng. I got nothing against hirn! But he's definitely
better way to ensure quality control. m bed with these street [
thugs]." Many had
For the first episode, we gathered in the Harlem know n of Bunk's prowess
as a detective frorn
apartment of Shine, a forty-three-year-old half past episodes. The op enin
g scene, in which he
Dominican, half-African-American man who man craftily obtains a co1u .
. -c.ess10
n, rem forced their
aged a gang for fifteen years before heading to prison v1ew at the Bunk is too g
oo d not to be hiding
for a ten-year drug-trafficking sentence. I invited older sornethmg.
guys like Shine, most of whom had retired from the
2. P ediction nurnber one: M
drug trade, because they would have greater experience cNulty and the Bunk
wdl split. The observation
with rogue cops, political toughs, and everyone else regarding Bunk's
detective work led to a second
that makes The Wire s o appealing. They affectionately agreernent, narnely
258 WHEN TO ROB A BANK
that McNulty or Bunk will be taken down
shot, arrested, or killed. This was closely tied to
the view that McNulty and Bunk will come into
conflict. The rationale? Everyone felt that Marlo,
Proposition Joe, or another high-ranking gang
leader must have close (hitherto unexplained)
ties with one of these two detectives. "Other
wise," said Kool-J, an ex-drug supplier from
northern New Jersey, "there ain't no way they
could be meeting in a Holiday Inn!" Orlando, a
Brooklyn based ex-gang leader, believed the
ambitions of Bunk and McNulty would run into
each other. "One of them will be taken down.
Either the white hoy gets drunk and shoots sorne
[guy] 'cause he's so pissed, or Bunk gives him up
to solve a case!"
3. The greatest uproar occurred when the upstart
Marlo challenged the veteran Prop Joe in the
co-op meeting. "If Prop Joe had halls, he'd be
dead in twenty-four hours ! " Orlando shouted.
"But white folks [who write the series] always
love to keep these uppity [characters] alive. No
way he'd survive in East New York more than a
T he evening ended with a series of additional
minute!" A series of bets then took place. All
wagers: Tony-T accepted challenges to his claim that.
told, roughly $8,000 was wagered on the timing
Bunk dies by the end of the season; Shine proposed
WHEN TO ROB A BANK 259
of Marlo's death. The bettors asked me-as the
neutral party-to hold the money. I delicately
replied that my piggy bank was already full.
4. Carcetti is a fool. Numerous observ
ers com
mented on the Baltimore mayor's lack of
"juice"
and experience when it carne to workin
g with
the feds. The federal police, m the1r . .
op1n1on,
love to come in and disrupt local police
investi-
gations by invoking the federal racket
eering
statutes ("RICO") as a means of breakin
g up
drug-trafficking rings. "When feds brin
g in
RICO, local guys feel like they got no [po
wer],"
Tony-T explained, offering sorne empat
hy to
local police who get neutered during
federal
busts. "White hoy [a.ka. Carcetti], if he
knew
what he was doing, would keep them cop
s on
Marlo just long enough to build a case-t
hen he
would trade it to the feds to get what he wan
ted."
Others chimed in, saying that the writers
either
didn't understand this basic fact, or they wan
ted
to portray Carcetti as ignorant.
 BANK WHEN TO ROB A BANK 261
260 WHEN TO ROB A
,
Joe ; the youngest attendee These laws ra rely lead to reductions in gang mem
that Marlo would kill Pr op
r- old Flavor, p laced
$2, 500 on bership, gang violence, or gang crime. In fact, police
the tw en ty -n in e -yea
ment and revealing his clos
e officers I know find these ordinances and sta tutes a
Clay Davis escaping indict
w aste of time. Cops wou ld much ra ther "control and
ties with Marlo.
wagered five dollars that conta in" gang activity. Most officers who work in inner
I felt obliged to chime in: I double ,
Baltimore Sun would cities understand that you cannot elimin ate gang activ
the circulation of The isode 4.
t ke over by W arr en Buffett by Ep ity entirely-arrest two gang memb ers and you will
attr actin g a a
h to ta ke my b et. find a dozen others waiting in line to ta ke their places.
No one was interested enoug
Police know tha t gang members have great knowledge
watch
kat esh wen t o n to w rite nine columns about a bout local crimes, so they r ely on a trade -off: keep
Ven
friends.
bis criminally incline d gangs isolated to p articular a rea s, don't let their crimi
ing The Wire with
Freakonomics.com. nal. activities spil l over into other spaces, and use high
The y can all be found at
ranking gang members for information.
This stra tegy actually prevents membership from
THE GANGTAX expanding, at lea st in big cities wher e gangs ar e eco

(SUDHIR VENKATESH) nomically oriented. Beat cops who run the streets make
s n a te recently pass ed a
bill ma king it sure that gang leaders don't prey upon too many kids
New York 's st a t e e
into a street gang. for recruiting purposes. In effect, this kind of policing
illegal to recruit some one
by city officials and legis- limits the rea ch of gangs. It may not b e soci ally desir
In the never- end ing fight
s to c omb a t g a ng s, thi s is one of the latest efforts a ble po licing, but it works if you mea sur e e ffectiven ess
lator e included :
er initiatives hav by reductions in g ang memb ership.
to outmaneuver them. Oth
n es th a t lim it two or more gang memb ers I called a few gang leaders in Chica go a nd a sked
city ordin a c
in p ubli c sp ace ; scho ol c
o des that b an them about the greatest obst acles to recruiting and
fro m ha ngi ng o ut
and colors tha t sig
nify gang retaining members. Here a re a few answers:
the use of hats, clothing,
p ubli c housing auth
orities that evict Michael (thirty years old, African American) was
membe rshi p; a n d

s who allow gang mem

bers (or any other insistent tha t to day's g angs are mostly "drug crews,"
le a s ehol de r
the housing unit. i. e., businesses:
"crimin al") to live inside
 ROB A BANK WHEN TO ROB A BANK 263
262 WHEN TO
n my
to jobs. If a n--- -r i
We always lose people ng as there
rememb er growing up and all these cats used to get
a g oo d j ob , h e's gone . So, as lo b eat up. You know what? This would actually help
crew g e ts
p rob
ther, th en we have no
ain't no work fo r a bro me because it would get rid of a lo t of these folks
us hav e families, we
're not in school
lem. M o st of who do nothing for us exc ept cause trouble. In fact,
ach o th er up, acting stu
pid. We're out here l'd b e willing to work with the cops if they want to
be ating e
ney. You got
on the stree ts
trying to make ou r mo call me . Mayb e we could help each other out?
I'm
s e p eo pl e t ellin g us to get an edu cation-
all the
do I
llars each month. Why
making thousands of do My good friend Dorothy ne ver ran a gang, but as an
need to go to school? out reach work er who h elps yo ung p eopl e in the ghe tto

tu rn th ei r lives a round, she has pretty good insight. She

w ye a rs old, Afri
can American)
Da rnell (thuty -t o re calle d sorne of her o wn gang-intervention effor ts in
more cre ative.
said p olice should b e the 1990s and carne up with th e following suggestion:

catc h one of us-I'd

make the boy
Le t's sa y yo u Tax the n-----s! That's what I would do ifl was the
eup. Maybe for
two week s.
wear a dress and mak mayor. Don't put them in jail, but take fifty p er
chool looking like a
girl. Let him
Let the bo y g o to s cent of their money. You know what I mean? Find
ts looking like he
's gay. I guarantee
wal k th e str ee them on the streets if they're misb ehaving, g rab
--rs if
time holding on to n--
you, we'd have a hard half of their cash, and put it into a community fund.
you do shit like that ! Let the block clubs have it, let the chu rches have
the money. 1 guarantee yo u that a lot of b rothers
old, half Puer
to Rican, half
Jo -Jo (fo r ty-nine ye a rs will think twice if you get to their pocketb ooks.
uld do
black) said the cops sho
lnte resting thought. 1 wonder whether ma rket fo rces
the y di d when I was younger. Drop a
. . . what might exer t the kind of discipline required to limit the
Vic elords territory
late a nit.
Discip le off in involvement of young people in gang-controlled drug
it. I
kicked. And keep domg
Let him get his ass econo mies. If, as Tre asu r y Se cre tary Paulson reminds
264 WHEN TO ROB A BANK WHEN TO ROB A BA
NK 26S

us, "market discipline" is sufficient to regulate the How long do yo u think it

has been since someone
financia! markets, perhaps it could be effective in the answered yes to question
12(c) in part lO(b):
underground.
Oh, yes, I forgot about Bear Stearns. (Sorry, couldn't Between March 23, 1933,
and May 8, 1945, did you
resist.) work for or associate in an
y way (either directly or
indirectly) with any Germ
an, Nazi, or SS military
unit, paramilitary unit, self-
DON'T BURN THE FOOD unit, citizen unit, police
defense unit, vigilan te
(SDL) unit, gover nment agency
or office, extermination cam
p, concentration camp,
In a sample of thirteen African countries between 1999 prisoner of war camp, pr
ison, labor camp, or tran
and 2004, 52 percent of women surveyed say they sit camp?
think that wife-beating is justified if she neglects the
children; around 45 percent think it's justified if she I also wonder wh at kind
of person an swers yes to
questio n: this
goes out without telling the husband or argues with
him; 36 percent if she refuses sex, and 30 percent if she
burns the food. Have you ever been a memb
er of or in any way
And this is what the women think. associated (either directly or
indirectly) with a ter
We live in a strange world. rorist organization?

I'm sur prised we still bother

WHEN WAS THE LAST TIME SOMEONE to ask this question:
ANSWERED "YES" TO ONE OF THESE Have you ever been a memb
QUESTIONS'? er of or in any way
associated (either directly or
(SDL)
indirectly) with the
Communist Party?
In order to become a U.S. citizen, one has to complete
the Immigration and Naturalization Service's Form There are sorne trickier questio
ns, though, like this
N-400. one:
266 WHEN TO ROB A BANK WHEN TO ROB
A BANK 267

Have you ever committed a crime or offense for "We're going to have
sorne idiots come
room," he begins. "T out of this
which you were not arrested? hose of you feeling
yourselves, stop it. You good about
ain't did noth ing yet."
recies his career sta Fryar
Not many people can truthfully answer no to that . ts: 17 NFL season
hab1t smce he was 13, s, a drug
last question, but I presume everyone does anyway. and four trips to jail.
first time, I was stopped "The
Is there any point to asking questions when you in New Jersey," he
was on my way to sho says. "I
know that people will never give a yes answer? ot somebo dy. Dnv mg my
BMW. I had g uns in
It turns out that there actually is a point to such the trunk, and I go
jail. The second time, t taken to
questions: U.S. law enforcement can use demonstrably also guns. Third t
domestic abuse. Four th ime was
false answers against individuals to prosecute or deport time, it was gu ns ag
No. Yeah, yeah, it was g ain.
them. Indeed, sorne officers I was speaking with the uns again. Things got
bad for me, I put a .44 so
other day said they wished there were more questions Magnum up to my hea
pulled the trigger." Now d and
on terrorist activities on the N-400. Fryar is a minister. "
When
was ro okie," he says, "we didn't h
hke th1s [symposium]. ave anything
I had to learn it the
IS PLAXICO BURRESS AN ANOMALY? way. Don't use me as an hard
example of what you can
(SJD) get away with, brother
s. Use me as an exam
what you shouldn't do." ple of
A few years back, I wrote an article for the Times
Magazine about the NFL's annual "rookie symposium,"
a four-day gathering during which the league tries to It looks l ike Plaxico
Burress didn't pay atten
briefly met Burress ba tion. I
warn incoming players about all the pitfalls they may ck when he was first dra
the Pittsburgh Steeler fte d b y
face-personal threats, bad influences, gold-digging s, and have followed his
care er
women, dishonest money managers, etc. dum closely ever since. I have conclude
first unpression was pr d that my
The NFL even brought in a bunch of veterans and etty much accurate: he is a
A knuck lehead. His late grade
retirees to try to teach the young guys sorne lessons. One st m isstep-shooting
in the leg in a night himself
was the former wide receiver Irving Fryar. As I wrote: club-is easily the most
serious
 OB A BANK
268 WHEN TO R WHEN TO ROB A BANK 269
of a
al p ossession
well g o t o pr ison for cr imin
(he may FORGET ABOUT HAVING YOUR FRIENDS
N e w York City la
w), but his history on
handg u n u n d e r
iot's che cklist. OVER FOR DINNER; IN MISSOURI IT'S
o ff t he fi el d r eads li ke an id
an d Ac cordin g to an YOUR ENEMIES YOU WANT TO INVITE
o w a no m alo u s is Burress ?
B ut h ted that 20 (SDL)
o t v e ry. O ne i nsider estima
ESPN rep ort, n yers ca rry con
Maj or L ea gu e Baseb all pla For years , I've fantasized about buying a gun. The
percent of o has worked
as a
ea p o n s . A fo r mer c o p wh only reason I warit one is tha t if a n intruder enters my
ceale d w
p la y ers put the nu
mb er as "close
bodyguard for N B A hous e and tries to terr orize my family, 1 would like to
ere's wh at ESP
N
c en t." A s fo r the NFL? H be able to defend us . The baseba ll bat under the b ed
to 60 p er
nd P a tri ots w ide re
c eiver Jabar
w E n g la just do esn't seem sufficient. Never mind that I a m a
re p or ts : "Ne
r h imself, said he
thin ks 90 per-
g un o w ne tot al c o ward-at least I'd be able to imagine the sce
Gaffne y, a
have firearms ."
cent of NFL players fact that he sho t
nario would play out differently.
p ro b le m - a side from the Given my o wn heroic fantasies , 1 heartily endorse a
Burress's A nd
i s tha t h e did n't have a c arry permit. n e w law passed in Missou ri which stipulates that you
himself- o k plac e
w J e r se y, th e sho o tin g to
N e
while he lives in ael Bloomb erg
is can use deadly force again st someone who illeg ally
k Cit y, w h e re Mayor Mich enters your hom e ( or even your c ar), e ven if you aren't
in Ne w Yor
devoutly anti-gun . true , the ques-
in obvious danger. In most places , you need to prove
fig u res ar e e ven halfw ay you were in real danger of being hurt or killed in order
If the ESPN
r i s k of c arr yi ng a
n illegal handgun
ti on ari ses : I s t h e to justify the use of deadly force .
t th e average NFL
player faces
e r i s k th a From a crime deterrence theoretica l perspective
sm aller than th
out a gun?
in public w ith this la w ma kes sense to me. A burgla r has n o legiti
if he goes out
to have thou ght so .
Burress would seem gotten into
mate reason to be in your house. Burglary is a crime
i es a b o u t p layers who've
Of all the s tor
r, with high so cial c osts (victims feel an a wful sense of
e o f S ea n Taylo
h gu ns , th er e's also the cas violation when their home is ransacked, even if the
trouble wit ome even thou
gh he
th in hi s o w n h
who was shot to d ea bu rglar doesn't get much), but rel atively low expected
d tr i ed to defend
himself. punishments for the crimina l because arrest rates are
w a s a r m e d an
ete .
His weapon? A mach lo w. Most victims n ever see the burglars , so the y're
270 WHEN TO ROB A BANK WHEN TO ROB
A BANK 271
and make it lo ok p
difficult to catch, as opposed to street robberies I did lausible tha t he was
. M aybe you could tell . an m . truder.
a rough calculation many years ago, and if I remem hIm that you are hav
n ight p oker party an ing a late-
b er correctly, the risk of lost years of life for burglars d to just let himself
upstar.rs to join the . and come
m
who were shot and killed by their victim amounted to game Or maybe say
pnse party for a m there 's a sur-
about 15 percent of the total prison time the y could utual acquam . tance, so all the
will be out, and to co
expe ct to s erve for their crimes. In other words, if you me to your bedro o
lights
Never underestimate m at2AM
are a burglar, being killed by the resident should b e the creativity and d
of humans-. or the . evm. .usn
. ess
a s erious concern. If this law encouraged more resi speed Wit h which La w
will take the first e
dents to kili intruders, there would likely be fewer xample of th.Is and
Order
tum It mto an
burglaries
episode.
.
On the other hand, this law probably won't have
much real impact on crime. The kind of people that NO MORE o.e. GUN BAN? NO BI
shoot burglars when they catch them in their homes are (SDL) G DEAL
likely to shoot the burglar whether such a protective law
:he Supreme Cou
is in place or not. (That is, more or less, my reading of rt recently struck do
m Washington, D. C . wn the gun ban
the evidence on concealed-weapons laws.) I think that, . A Si.mlla r gun ban in Chica .
be the next to go. go may
in practice, the y mostly let you off the hook legally if
you shoot an intruder. If victim behavior doesn't actu The primary ration
ale for these gun ba
crime . Do they ac ns Is
. to lower
ally change, there is little reason for burglar behavior to tually work? There
. e academic resea
httl is remarkably
shift. Even worse, you get a bunch of bumblers like me rch tht d.rrectly an
tion but there Is . . swers this ques-
trying to fight burglars under the new law, and we end s orne mdi rect evidence.
up getting shot. L'et 's start with the
direct evidence. Ther
a few academic e have been
The law do es bring to mind sorne interesting pos . papers that dire
ctly analyzed the D. C
gun ban, and the pap . .
sibilities, however. If there is someone you dislike so ers carne to
opp os1t e conclusions
much that you want him dead, ali you need to do is The ndamental
difficulty with this .
research Is that yo k. d of
figure out how to get him to come inside your house, u have one law cha
nge So yo mu can
 272 WHEN TO ROB A BANK WHEN TO ROB
A BANK 273
drug trade, there is n
compare D.C. before and after. Or you can try to find ext to nothing you ca
the g uns out of their h n do to keep
a control group and compare D.C. before and after to ands.
My view is that we
that control group before and after (in what economists should not be maki
about gun ownership' ng po licies
call a "differences-in-differences analysis"). becau
. se they simply
What seems to work . don't work.
The problem here is that crime rates are volatile and Is harshly purushi
use guns illegally. ng p eople who
. it really matters what control group you pick. I would

For instance, if you co
argue that the most sensible control groups are other mmit a fce1ony w1th
get a mand atory five a gun, you
large, crime-ridden cities like Baltimore or St. Louis. -year dd-on to Juou
tence. Where this has r pnson sen-
When you use those cities as controls, the gun ban been done there Is .
that gun violence has d sorne evidence
doesn't seem to work. ec1med (albe1t w1th
tution toward crimes sorne substi-
What about indirect evidence? In Chicago we have be1ng
. done with othe
These sorts of laws a r weapons).
.
re at tractiv
a gun ban and 80 percent of homicides are done with e for many reasons.
First, unlike other g . .
guns. The best I could find about the share of homi un pohc ies' they work. Seco
they don't impose a c nd'
ost on law-abiding
cides done with guns in D.C. is from a blog post which to have guns. folks who want
claims 80 percent in D.C. as well. Nationwide that
number is 67.9 percent, according to the FBI.
Based on those numbers, it is hard for someone to WHAT'S THE BE
ST WAY TO
CUT GUN DEAT
argue with a straight face that the gun ban is doing its HS?
job. (And it is not that D.C. and Chicago have unusu (S]D)
ally low overall homicide rates either.) Are there more guns
It seems to me that these citywide gun bans are as in the U. S. or more opin
guns? ions about
ineffective as many other gun policies are for reduc
d to
ing gun crime. It is extremely difficult to legislate or :: ;Y We have written widely about guns
the rs. ere we present over
regulate guns when there is an active black market and a quorum with a na rrow
tiocus: Wha t are sorn .
a huge stock of existing guns. When the people who e goo d I"deas to cut gun deaths)
.
Let's put as1d e momen tan-1y the s .
value guns the most are the ones who use them in the tand ard d1scuss1on
 ROB A BANK
274 WHEN TO WHEN TO ROB A BANK 275
ith te
ht t b a r a r ms and deal i n ste ad w stem from arguments or something related to
ab out the rig o e
n d eaths m
d: th er e are a lot of gu
reality on the grou gangs. A big part of America's problem with g un
n

ow ca n they be le
ssened?
tr y; h violence stems from young guys walking or driving
thi s coun
w ho thi nk about th1 .s .issue
ed a f w p e op le around with g un s and then doing stupid thin gs
We ask e
a to cut gn
: W ha t's y our best ide
a simple questio n
n o t prson ally
like with them.
. . th e U S ""> You may Youn g guys carry g un s in part because this helps
hom1c.1de s m
s m e that most
of them are
t it str ik
the se an swers, bu
e
them get sorne street cred. For a proj ect that Phil
t y ou ty pically
hear i n the gun
e tha wha Co ok, A nthon y Braga, and I conducted with the
more sen sibl n

de bate these days. sociologist Sudhir Venkatesh (published in Eco

nomic Journal), Venkatesh asked p e ople on the
Cormick Founda
tio n professor
T s Ludwig is the Mc
Jen
rat i n, Ja w, a nd
.
publlc p o icy r South Side of Chicago why the y carry guns. As one
of social ser
vice adminst o
gang member said, in the absence o f having a gun:
chool.
Chicago's Harris S
at the University of
s "Who [is] going to fear me ? Who [is] going to take
g ive o t re w ard s-1 mean big, seriou
We shou ld u me seriously? Nobody. I'm a pussy unless I got my
e illegal
rds - fo r tip s tha t h elp police confiscat gun ."
rewa
gun s.
di fr om gun su
icides than hom1 -
More pe o pl e e Gun s are something that a lot of gu ys seem to
. S , b ut g un cri me
accounts for most
c1.d es 1 th e U . . have mostly to take to fo otball and basketball games
n
cia l costs that Phil
Co ok and
bill i i so
of the $100
on n or partie s and to show off to their friends or girl
vi le n ce imposes
each year. Most
I estm ate g u n o friends. At the same time, the costs of carrying
gu n s (around 75
per
m mit ted w ith
murders are co g guns might be low. A previous Freakonomics post
i Chi cag o). We also kn ow that youn
cent in 20 05 n by Venkatesh note s that cops are less likely to be
e vastly
pl - par ticul arl y youn g males-ar len ient for other offen se s if someone . is caught with
p eo e
murders
am o g off enders; most
over-re prese
n ted n
a gun . But the chances of being arre sted with a gun
ors ; a nd a large sha
re of all homicide s
happen ou tdo are probably modest, since the probability that even
 B A BANK
276 WHEN TO RO WHEN TO ROB A BANK 2?7

m e or prop erty cri

me results i n
a serio us vi ole n t cri Gro wi ng up i n gangs and livi ng the gan g lifestyle, 1
w.
arrest is surprisi ngly lo have firsthand k no wledge after seei ng so many
seri ous money for
a nonymous tips
Giv ing out people die from gangs and guns ! O ne great idea
al g u ns would i ncre
ase the costs of car .
ab o ut illeg that can help to cut gun deaths i n the U. S . 1 s havmg
gun
the benefits; flashi ng a
rying a gun and reduce the perpetrator's family be fina ncially responsible
still sc ore p oi nts, but
it would now
at a pa rty mi ght for all emotional, mental, and physical damages
gal risk.
massively i ncrease your le that result from the victim's family's loss.
e re w ar d s mi gh t hel p undercut trust among
T hes This should i nclude (but not be limited to) gar
ers a nd could be p
articularly helpful i n
ga n g me mb nishin g their wages for their e ntire lives and havi ng
of logistical
s out o f sch ools. A bun ch
keeping g u n them pay all funeral arrangements and all outstand
g how
es w o u l d ne ed t o be worked out, i ncludi n i ng debts. If the perpetrator is under eighteen, then
i&su
d be (l thi n k $1
,000 or more
large the re wards woul not on ly will he have to do time i n prison but his
razy ) a nd h o w police
should respond
would n' t be c parents shoul d also be required to serve at least half
civil
tip s a nd c on fisc ate guns while respe cti ng of the time on behalf of his crime. Everything starts
to
liberties. - and stops in the home!
this i d ea do es ha ve the big advantage of get
B ut n con
The greatest way to make this happen is to make
public debate about gu
ti ng us out of the stale ss o n this
it law and set up organizations that educate paren ts
es u s a w ay t o make pro gre
trol, and it giv on h o w to stop gun violence and clearly teach [ their
t away.
maj or social problem righ child ren] the consequences that result from gun
violence. At Tur ni ng the Hearts Cen ter, through
ny" Cas tr o Jr. became
an activ e gang mem
Jesus "M an our GAME program, we fou nd that the youn g
arceration, he
at the ag e of t w elve. After a brief inc pe ople we are working with care about their par
ber
Chu rch of San Diego
and now runs
joined Cor ner ston e e nts a nd what they think.
Through Mentoring
and
ME (G ang A war en ess
the GA I get parents' input on what goes on at home so
m at the T urn ing the Hearts Center
Education) pro gra that I can implement a nd address their issues into
iforni a.
in Chu la Vista, Cal our GAME curriculum. Kids have respect for their
 WHEN TO ROB A BANK 279
BANK
278 WHEN TO ROB A
would/ advocate for improving roads-helping to change
parents-and if parents knew that they
's behavior, perhaps the highway design philosophy from the "nut
could do time for their children behind the wheel" to the "forgiving roadside." Im
in their lives.
they would stay more involved provements in motor -vehicle safety were cited by
s around the U.S.
If the people in communitie the Centers for Disease Control and Prevention as a
the Hearts Center,
can model what we do at Turning twentieth-century success story.
the world. Hard-core
we can make a difference in A similar national agency is needed to help
core consequences.
issues like gun deaths need hard- reduce the public health problems due to firearms.
ssor of health policy and
Firearms deaths are currently the second leading
David Hemenway is a profe
y Control Research Center
cause of injury deaths in' the United States ; more
director of the Harvard Injur
blic Health, and author of
than 270 U.S. civilians were shot per day in 2005,
at the Harvard School of Pu and 84 of those died. In response, Congress should
Prvate Guns , Public Health. create a national agency (as it did for motor vehi
y Administration. cles) with a mission to reduce the harm caused by
Create the National Firearm Safet f.1rearms .
of motor vehicle
A milestone in the history
The agency should create and maintain compre
safety in the United
States , and the world , was the
of what is now the hensive and detailed national data sy stems for fire
establishment (forty years ago) arms injuries and deaths and provide funding for
fety Administration
National Highway Traffic Sa res earch. (Currently the National Violent. Death
d a series of data
(NHTSA). The NHTSA create Reporting System provides funding for only seven
sys tems on motor veh
icle crashes and deaths and
sis. This enabled us
teen state data sy stems and no money for research.)
provided funding for data analy The agency should require safety and crime
reduce traffic inju-
to know which policies work to fighting characteristics on all firearms manufac
ries and which don't. tured and sold in the U.S. It should ban from
s afety s tandards
The NHTSA mandated many
g to collapsible steer regular civilian use products which are not needed
for cars, including those leadin for hunting or protection and which only endanger
airbags . It be came an
ing columns , s eat belts , and
 WHEN TO ROB A BANK 281
BANK
280 WHEN TO ROB A

power to ensure that With a little detective work, I found another flight
the public. It should have the that could get me home on a different airline. I bought
all firearm trans
there are background checks for a one-way ticket and headed for airport security.
being sold to crimi-
fers to help prevent guns from Of course, the last-minute purchase of a one-way
nals and terrorists. .
ticket sets off the lights and buzzers for the TSA. So
s and the power
The agency needs the resource I'm pulled out of the line and searched. First the full
all, and research ca
(including standard setting, rec body search. Then the luggage.
able decisions about
pability) for making reason It didn't occur to me that my latest research was
mine the side-impact
firear ms. The power to deter going to get me into trouble. I've been thinking a lot
tomobiles resides with
performance standards for au about terrorism lately. Among the things I had in my
the power to decide
a regulator y agency, as does carry-on was a detailed description of the 9 / 11 ter
d all-terrain vehicles
whether to ban three-wheele rorists' activities, replete with pictures of each of the
heeled vehicles).
(while allowing the safer four-w terrorists and information about their background.
ulating the man
Similarly, each specific rule reg Also, pages of my scribblings on terrorist incentives,
should go through a
ufacture and sale of firearms potential targets, etc. It also was the first thing the
e process rather than
more scientific administrativ screener pulled out of my bag. The previously cheery
process. It's time to
the more political legislative mood turned dark. Four TSA employees suddenly sur
firearm safety.
take sorne of the politics out of rounded me. They didn't seem very impressed with my
explanation. When the boss arrived, one of the screen
TO GUANTANAMO
I ALMOST GOT SENT ers said, "He claims to be an economics professor who
(SOL) studies terrorism."
ach Airport yesterday, They proceed to take every last item out of both my
ive d at the W est Pa lm Be
I arr bags. It has been a very long time since I cleaned out
ck to Chicago, only to see
trying to make my way ba my book bag. This is a bag with twelve separate pock
departure board as simply
my flight time listed on the ets, ali of which are filled with junk.
YE D. Th ey we re n't ev en pretending it was leaving
DE LA "What is this?" the screener asks.
in the foreseeable future.
282 WHEN TO ROB A BANK
"It's a Monsters, Inc. lip gloss and key chain," I
respond.
And so it went for thirty minutes. Other than the
lip gloss, he was particularly interested in my passport
(luckily it was really mine), my PowerPoint presenta
tion, the random pills floating among the crevices of
my bag ecovered with lint and pencil lead from years
in purgatory), and a beat-up book (When Bad Things
Happen to Good People).
Finally satisfied that I was playing for the home team,
he allowed me to board a plane to Chicago. Thank God
I left at home my copy of the terrorist handbook that I
recently blogged about., or I would have instead been
flying straight to Cuba.
WEIRD BUT TRUE: FREAKONOMICS
FLAVORED COP SHOW BOUGHT BY NBC
(SJD)
A few months back., Levitt and I were asked help
put together a TV cop show based on the concepts
of Freakonomics. The gist: a big-city police force, in
crisis., hires a rogue academic to help get crime under
control.
It struck us as a totally crazy but also strangely
appealing idea. The concept had been hatched by Brian
Taylor, a young exec at Kelsey Grammer's production
WHEN TO ROB A BANK 283
company, Grammnet., which then partnered with
Lionsgate; and the acclaimed writer Kevin Fox was
brought on board. The show would be called Pariah.
A couple weeks ago., Levitt and I went to Los
Angeles to help these guys pitch the show to the TV
networks. Since we know nothing about TV, we tried
to not talk too much and let Kevin, Brian, and Kelsey
do their thing. And they did! Here's the news, from
Deadline.com:
NBC has bought Pariah . .. [T]he police proce
dural features characters inspired by the economic
theory "Freakonomics" mad popular by authors/
economists Steven Levitt & Stephen Dubner. In
Pariah, the Mayor of San Diego appoints a rogue
academic with no Iaw enforcement background to
run a task force using Freakonomics-inspired alter
native methods of policing.
Who knows how far this will go., but the ride has
been fun so far. It was particularly enlightening to talk
to Grammer about acting (he's currently starring in
the high-end drama Boss, playing a Daley-ish mayor
of Chicago). At one point., I asked him what it is about
certain people that make their faces so appealing on the
screen while other people., who might be better-looking
284 WHEN TO ROB A BANK

y, just don't have

or more attractive in sorne other wa
that appeal.
size. Most suc-
He answered immediately: "Head
cessful actors have really big heads." Chapter 10
think so.
Physiologically, he meant. At least I More Sex Please,
Update: the collapse of thi
s deal was fast even by We're Economists
just a few conference calls,
Hollywood standards. After

cers that they were chang
NBC informed the produ
changed their minds, r
ing direction, or that they had
, or something. We are st1ll
they were changing their ol
Of course we've blogged about sex but,
the sun.
waiting for our moment in
weirdly, only other people's sex: not
one of our eight thousand blog posts
ever mentions our own sexual experiences. That said,
we have had a few things to say about prostitution,
STDs, and online dating.

BREAKING NEWS: SOCCER FANS NOT

AS HORNY AS PREVIOUSLY THOUGHT
(SJD)

A few years ago, Germany legalized prostitution. lt

wasn't hard to surmise that this was meant to make
Germany a bit more hospitable for World Cup fans.
Brothels across the country staffed up and prepared for